Hey, but it's alright by me, this notion will soon go viral anyway, and the fact that it will dawn on people is far more important than that I thought of it. And besides, I like saying "All your neighbors are zombies" better than "You're all zombies" to begin with.
Still, to Mr. Arends, I would say: It's not like Japan has one and the US has the other: America has both zombie banks AND zombie homeowners. Plus a lot of zombie unemployed, Wal-Mart greeters and burgerflippers, and I’m not all that sure it doesn't have a zombie government too.
What drives the US economy today is zombie money. One part is the keystrokes that make up TARP, stimulus and quantitative easing, the other is the funny accounting that allows the gamblers to pretend they didn't lose their wagers.
When the banks go belly-up so does the real economy. Then again, the only way to prevent a banking collapse is to actively make the real economy collapse. And even that prevention can only be just temporary. What underlies it all is the underlying value of swaps, (mortgage-backed) securities and other derivatives on and off balance sheets which Wall Street successfully lobbied the government into "legally ignoring" that very underlying value for.
But the resulting "funny" mark-to-fantasy accounting was never meant to last forever, and for good reason: it can't and it won't. As Janet Tavakoli puts it, talking about the ongoing Foreclosure Gate quagmire: